Industrial restructuring and regional adjustment in Asian NIEs

Abstract

The Asian newly industrializing economies (NIEs) are currently experiencing a shortage of unskilled labor, which makes it difficult for them to remain competitive in low-technology, labor-intensive industries. They are also under pressure from the industrialized economies to open up domestic markets and to readjust the value of their currencies. The author surveys the process of industrial restructuring and its aggregate consequences in the NIEs. Also discussed are macro-level adjustment strategies including offshore investment, upgrading the technological level of industries, expanding the hinterland, and labor importation. Questions concerned with labor market and employment are addressed, given the trend of enterprises' adopting a more flexible labor strategy. Finally, the need to look into local variations in enterprise adjustment strategy is discussed, in particular, with a focus on the local context. -from Author